Switched On: Big Kindle on Campus

Ross Rubin (@rossrubin) contributes Switched On, a column about consumer technology.

Amazon's Kindle DX includes a few tweaks such as automatically rotating the orientation of the screen when it is placed in landscape mode and adjustable page margins because... well, CEO Jeff Bezos seems to like the feature. Literally, though, the biggest change is the new 9.7-inch electronic ink screen, which displays two and a half times more content than the 6-inch screen on the Kindle 2 and Sony Reader. The expanded display allows more detailed graphics to be seen without zooming or panning, and is better suited to a wide range of source material including maps, technical diagrams, and sheet music. But textbooks and newspapers were singled out as two printed sources that are particularly significant for the forthcoming device.

These publications both benefit from the larger Kindle screen size, but each face different challenges in finding success on the Kindle DX. For newspapers, the Kindle DX cuts down on the costs of printing. Newspapers, though, are already struggling against competitors that did away with that expense years ago, including blogs that break stories and online entities such as Craigslist, eBay and Google that have siphoned away advertising revenue. Textbooks, on the other hand, have no major electronic competition, and print still retains advantages such as better readability and color. But digital textbooks must compete with used textbooks, a major market on college campuses, and likely will not be able to be resold if other digital content is a predecessor.

At the Kindle DX launch, representatives from The New York Times Company and Case Western Reserve University both characterized their involvement with the Kindle DX as a trial or experimentation. What's behind the arm's length embrace?

Paradoxically, as the Kindle's design becomes optimized for mainstream content, its price becomes less so. Even with an announced geography-limited newspaper subscription discount, the Kindle's DX's $490 price -- a 36 percent premium over the Kindle 2 -- may be too high to justify for the daily news. For textbooks, however, the Kindle DX -- and the savings it may preclude by circumventing used books -- are minor expenses compared to tuition and housing at many undergraduate colleges. Millions of students eagerly plunked down hundreds of dollars for a lightweight iPod that let them take their music wherever they went. They would surely consider a device that offered similar advantages for their textbooks.

Even at launch, textbooks on the Kindle DX will have features that no printed textbook has, including text-to-speech, searching, on-the-fly definition lookups, non-destructive annotation and, oh yes, resizeable page margins. There is even limited, albeit kludgy, sharing of snippets allowed. Fast-forward a few years and one can imagine full collaboration among classmates or study groups focusing in on key elements of a text or overlays of lecture recordings or transcription. And as textbooks are somewhat of a consumable, new business models could emerge that enable "rental" of the textbook for a semester, making prices more competitive with used books and with much less hassle and back strain.

Amazon, though, may need to change some key elements of the Kindle or its business model in order to compete effectively in the electronic textbook market as it courts institutions in addition to consumers. For example, the company has avoided integrating Wi-Fi, citing 3G as a superior consumer experience. In most cases, it is. But that's less of an issue on many college campuses that are blanketed in Wi-Fi. Colleges are also likely to favor products that support open standards that drive competition, innovation and ultimately lower prices.

Colleges often run their own college bookstores, which generate book revenue and drive traffic for school name-emblazoned clothing and other merchandise. The Kindle, in contrast, is ultimately a sleek vending machine only for Amazon, for which the Kindle Store is more important than the Kindle device. And the ability to remotely erase or lock a device could help as a theft deterrent.

Regardless of whether Amazon wins, though, it has taken a significant step by reaching agreements with publishers that it claims represent 50 percent of the textbook market. The future of the textbook market is about to be rewritten.

Ross Rubin is director of industry analysis for consumer technology at market research and analysis firm The NPD Group. Views expressed in Switched On are his own.